Though the Central government is striving hard to push digital economy, the ground reality is most of the people are still dependent on cash and ATMs. However, the northern region is facing shortage of at least 7,200 ATMs to match the Tamil Nadu-level, which has the highest concentration of ATMs among the states.

With just 18 ATMs per lakh of population, Jammu & Kashmir has the lowest number of ATMs in the northern region as compared to its population. As far as Haryana is concerned, it is 23 ATMs per lakh of population, Himachal Pradesh 23.5 ATMs and Punjab 24 ATMs per lakh, according to data compiled by Tata Communication Payment Solutions Ltd. (TCPSL).

The demand for cash has resulted in rise in ATM transaction volumes. However, the ATM system in the region is far from adequate at the moment. In rural areas, the situation is worse as the concentration of ATMs is less as compared to urban areas.

According to TCPSL research, Goa has the highest number of ATMs (64) per lakh of population followed by Chandigarh (55). Delhi has 47 ATMs per lakh of population.

Nationally, there are only 17 ATMs per lakh of population. Globally, the US has the highest penetration of ATMs with 173 cash-vending machines per lakh people.

In such a scenario, the need of the hour is massive uptick in the number of ATMs across the region not only to facilitate masses but also to increase financial inclusion.

According to TCPSL, Haryana needs at least 2,385 ATMs followed by Punjab (2,336) and Jammu & Kashmir (1,878) to match Tamil Nadu-level. Himachal Pradesh needs additional 619 ATMs. Since besides cash, value-added services such as balance enquiry, funds transfer and bill payments are also being offered by ATMs, increasing the ATM network will also increase digital transactions.

However, there are several impediments in increasing the ATM network. “The slow ATM rollout by banks is due to feasibility challenges. The rentals are very high. Besides, salaries of security staff and ATM operators, maintenance charges and electricity bills make opening ATMs an unviable proposition at certain locations,” said a senior public sector bank official. Private bank officials cited similar reasons for slow expansion.

According to data, as of December 14 last year, total cash in circulation stood at Rs 20.24 lakh crore, up 2.15 times in less than two years as of December 23, 2016, when cash in circulation depleted to Rs 9.4 lakh crore, owing to withdrawal of high-value currency notes (Rs 500 and Rs 1,000 denomination) due to demonetisation.

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